KENYA: An Introduction to Dispute Resolution: Arbitrators

The following Overview featured in Global 2023 and is awaiting update from the firm. 

Overview of Arbitration in Kenya 

Since the promulgation of the Constitution 2010, the alternative resolution of disputes in Kenya has acquired a constitutional imperative. Arbitration remains the main mode of alternative dispute resolution, as an autonomous legal framework is in place: the Arbitration Act 1995.

The Arbitration Act provides for the appointment of arbitrators, the taking of evidence, the hearing of disputes and post-award procedures. The overriding principle under the Arbitration Act is the sanctity of the arbitral proceedings, where the interference of the courts is limited to the extent it is permissible under law. This makes the role of the court in arbitral proceedings in Kenya more facilitative. Arbitral proceedings can be initiated by agreement of parties or by reference of the courts under the procedural rules of the court. Recourse against arbitral awards is only through an application for setting aside, unless the parties agreed to appeal against the award on points of law. The grounds for setting aside are limited and specified under the law.

Appeal of the High Court decision on a setting aside application to the Court of Appeal is generally not permitted. Such an appeal can only be allowed with the leave of the Court of Appeal where the High Court set aside an arbitral award on grounds other other than those stipulated in the Arbitration Act. This position has been espoused by the highest court in Kenya, the Supreme Court, which has reinforced the sanctity of arbitral proceedings and the ensuing arbitral awards in recent decisions, such as the case of Synergy Industrial Credit Limited v Cape Holdings Limited.

Most domestic arbitral awards are recognised and enforced by the courts, except on the very few occasions when they are set aside. There is a growing trend of most government entities and government institutions making applications to set aside arbitral awards made against them. Therefore, the enforcement process can sometime be long and involve further proceedings in the form of judicial review to compel government officers to settle the awards. However, as regards public institutions with corporate status, the awards can be enforced through the court as if the matter had been determined by the court.

There are various institutions that administer arbitrations in Kenya, with the Chartered Institute of Arbitrators Kenyan Branch being key among them; it mostly deals with domestic arbitrations, whereas the Nairobi Centre for International Arbitrations administers both local and international arbitrations. With the impact of COVID-19, virtual proceedings are now taking place, mostly for preliminary meetings. Virtual hearings are also possible where witnesses are out of the country. Parties are free to have hybrid proceedings – ie, both physical and virtual proceedings. To facilitate this trend, rules and guidelines have been developed to guide how virtual proceedings are to be conducted.

The Arbitration Act allows for the recognition and enforcement of international awards in accordance with the New York Convention. Generally, such awards are enforceable unless they go against the public policy of Kenya.

Third-party funding is still not allowed, although there are ongoing discussions around the issue, which may require reforms in the law.